U.S. firm puts firearms maker up for sale following Connecticut school shooting

Posted at 5:24 AM, Dec 18, 2012
and last updated 2012-12-18 05:24:41-05

LONDON (CNNMoney) — Private equity firm Cerberus has put U.S. firearms maker Freedom Group up for sale following Friday’s killing of 20 children and 6 adults at a school shooting in Connecticut.

Freedom Group includes Bushmaster, maker of the rifle used in the shooting at Sandy Hook school in Newtown. Cerberus bought Bushmaster in 2006 before adding another 10 makers of firearms, ammunition and accessories to the group.

Cerberus Capital Management said it would retain advisers to carry out a sale of the company, and then return that capital to its investors, which include the California State Teachers’ Retirement System (CalSTRS).

“It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level,” Cerberus said in a statement.

“We believe that this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect, without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so.”

CalSTRS, which manages the pensions for California public schoolteachers, said Monday it was likely to review whether its indirect investment in Freedom Group was compatible with its investment rules.

“Now that a tragic event like this has occurred, I’m sure that it is something that we will be discussing going forward,” CalSTRS spokesman Ricardo Duran told Fortune.

President Barack Obama said at a vigil for the victims and families Sunday night that he would use “whatever power this office holds … in an effort aimed at preventing more tragedies like this.”

Obama was elected on a platform which included reinstating the assault weapon ban but has since put his weight behind other legislative priorities.